The state role in teacher compensation

Policy makers have long been concerned with K–12 teachers’ compensation. Not only might increased teacher compensation purchase more skilled teachers, it might also influence how long teachers stay at their schools and in the teaching profession. Similarly, changes in the structure of teacher salary schedules may change the appeal of teaching even if average salaries remain the same. Much of the extant research on K–12 teacher salaries shows, to no great surprise, that teachers respond to salary changes (for examples, see Baugh and Stone 1982 and Murnane and Olsen 1989, 1990). Teachers’ salaries are just one component of teachers’ overall compensation, however. States and school districts also provide other incentives—both monetary and nonmonetary— aimed at attracting and retaining teachers. These incentives often target certain types of teachers in certain types of positions. In addition, teachers receive health and welfare and retirement benefit that add to their total compensation packages.